Asia’s dominance in electric vehicle battery production explained in stunning graph

• US and Europe seek to stop China’s dominance in battery production

• The reality is that China is increasingly eating up more land.

There are too many open fronts in the technology world. Most notable due to the amount of new information almost daily is information about semiconductors. It’s no secret that China and the US are locked in a tight battle for dominance in chip production. The United States has the licenses, the intent to invest, and the veto, but China has a clear roadmap for developing its chip companies and is investing a lot of money.

Another of these great battles is the battle for the electric car, but here the tide is turning and it is China, at least for now, that has the advantage. Overall, the Asian industry accounts for more than 90% of EV battery production. And this is brilliantly illustrated by the following graph:

Asian domination. China, Japan and South Korea are countries that share the EV battery production pie. The Chinese company CATL and the South Korean company LG have been fighting for leading positions for several years. There was no controversy as CATL was an extremely powerful company, but LG remained the second manufacturer. However, according to the latest data for 2023, China has changed the situation and has not only consolidated CATL as a powerhouse in this field, but also BYD has risen to second place.

LG takes third place, and Japanese Panasonic is fourth. The production of these companies in 2023 was no lower than in 2022, on the contrary, but BYD’s jump was impressive in just one year: from 72,841 megawatt hours in 2022 to 115,917. Panasonic is the only Japanese in the top ten most powerful and with third on the podium makes an important difference.

There are big boys in China. Now China continues to produce 57% of the world’s batteries thanks to this increase in BYD, and also thanks to CATL, which seems unstoppable. It has grown from 163,831 megawatts per hour in 2021 to 242,700 in 2023, a giant leap that leads not only to clean production but also to research. Last year, the Asian giant introduced a battery capable of traveling 400 kilometers on a 10-minute charge, as well as new generations of its batteries capable of covering a distance of up to 1,000 kilometers.

We see that other companies such as CALB, Farasis, Envision or Suynwoda produce much less, but they still make up an important percentage worldwide, which helps China continue to dominate this area.

Unstoppable. Considering all this, Asian countries dominate the global battery production by 91%, a situation that does not bother the West. Both Europe and the United States are poised to be a powerhouse when it comes to making EV batteries, but there’s a problem: Not only has the Chinese government been betting on the technology for years, it has a near-monopoly. in the distribution and production chain.

This is why the cheapest electric cars such as the MG 4 Electric or the BYD Seagull come from China, as China is estimated to have between 50% and 60% of rare earth mining quotas for companies under its control. in addition, it processes 80% of them. That’s not counting its dominance over lithium. This is why alternatives are proposed to avoid the Chinese chain, such as solid state batteries or recycling.

United States at war. While these alternatives emerge and consolidate, countries like the United States have a plan: put more vetoes on China. In particular, for electric vehicles and batteries at tariffs of up to 100%. This is a measure proposed by the Biden administration that is aimed at protecting American industry as well as continuing the trade war against China.

The increase will affect everything from cars (from 25% to 100%) to components such as lithium batteries (from 7.5% to 25%) and critical minerals for component production (from 25% to 50%). . It doesn’t end there as tariffs on solar cells will also increase by 25-50%, and on semiconductors by the same amount, doubling those tariffs.

If this is true, then we will see what China’s reaction will be, although the US insists that this is nothing more than a proportionate response to China’s excess capacity in the electric vehicle sector, so it is not worried. Indeed, Chinese cars hardly sell in the US, so this may be more of an election ploy than something that actually hurts the Chinese market. Another story is the European market.

On the other hand, Chinese companies are not ready to see them, and together with CATL’s R&D efforts, we have BYD, which is moving, and seeing that there are countries that do not give a good look to Chinese cars, they decide to open factories in Europe .

Graphics | Visual capitalist

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